SUPERIOR COURT OF JUSTICE – ONTARIO
RE: YMCA OF GREATER TORONTO Applicant
- and -
ROYAL BANK OF CANADA, CANADIAN IMPERIAL BANK OF COMMERCE, TORONTO-DOMINION BANK o/a TD CANADA TRUST, BANK OF MONTREAL and BANK OF NOVA SCOTIA O/A SCOTIABANK
Respondents
BEFORE: Mr. Justice Chalmers
COUNSEL: R. Lester for the Applicant
No one appearing for the Respondents
HEARD: By Writing
ENDORSEMENT
Overview
1YMCA brings this motion to extend the Norwich Order of Justice Myers dated April 6, 2021, to May 31, 2022. YMCA also seeks to broaden the effect of the Norwich Order to include the personal bank accounts of the following individuals.
Elston Richardson (dob March 11, 1968)
Maria Lisa Richardson aka Maria Liza Richardson aka Lisa Blasco (dob April 29, 1970);
Dayana Pantaleo (dob January 17, 1969);
Maurizio Bianconi (dob January 17, 1969);
Robert Spano (dob April 26, 1977);
Fabio Recchia (dob July 7, 1988);
Thomas Patrick Burns (dob December 6, 1962).
2For the reasons set out below I grant the relief sought.
Background Facts
3YMCA alleges that it is the victim of a fraud arising out of the administration of a government training program; the Canada-Ontario Job Grant (COJG). YMCA alleges that various individuals submitted fraudulent claims and applications to the YMCA through its employee, Christine Ruth Burns. After the claims were paid, Ms. Burns received payments/kickbacks from the individuals who had received payments from the COJG program. YMCA alleges that it suffered a loss of $2,200,000.
4By Order dated April 6, 2021, Myers J. granted a Norwich Order to the YMCA. He ordered the Respondent Banks to produce to YMCA the bank accounts of Christine Burns, and the other accounts listed in Schedule B of the Order (collectively the Accounts), for the period from January 1, 2015, to the present date. Paragraphs 1, 2, 3 and 4 of the Order expired on July 6, 2021. By Order dated August 30, 2021, I extended the Norwich Order to November 30, 2021.
5At the time, YMCA moved to extend the Norwich Order to November 30, 2021. YMCA also sought to broaden the Norwich Order to include the personal accounts of a number of individuals. I was of the view that the Applicant had not provided sufficient evidence to establish a connection between the individuals and the fraudulent scheme. I did not broaden the Norwich Order to include the additional accounts. This was without prejudice to the Applicant providing further evidence to establish that the accounts of the additional parties are relevant and necessary.
6By Notice of Motion dated February 23, 2022, YMCA provided additional evidence in support of its motion to broaden the scope of the Norwich Order to allow YMCA to gain access to the banking records of other persons who have been identified as having involvement in the fraud at issue. The Motion was on notice to the Respondent banks. The Respondents do not oppose the relief sought.
7YMCA submitted the affidavit of Rehana Moosa, sworn February 22, 2022. Ms. Moosa is a forensic accountant. She was the principal author of a forensic investigation report on the fraud alleged by YMCA. Ms. Moosa provided further information with respect to how the additional parties are related to the alleged fraud.
8Ms. Moosa states that there were several training companies involved in the COJG program; Competitive Computing Consultants Inc. (a company controlled by Dayana Pantaleo), Core Business Training Group Inc. (a company controlled by Elston Richardson), Meridian Employee Development, (a company controlled by Maurizio Bianconi) and Beauty Industry Training (a company controlled by Fabio Recchia).
9When the training company was Competitive Computing, YMCA would pay for the training supposedly provided under the COJG program. Competitive Computing would keep a portion of the payment and an amount was paid to Event Renew, the principals of which are Christine Burns and her husband, Thomas Patrick Burns. Competitive Computing’s share of the YMCA cheque was transferred into the TD bank account (account #6444926) in the name of Dayana Pantaleo.
10When the training company was Core Business Training, YMCA deposited money into an RBC bank account (#06702 109-263-4) in the name of Gescoro Inc., which is a money transfer/cheque cashing business. Once the YMCA cheque was deposited into the Gescoco’s RBC account, the funds were transferred to Richco Realty, a company controlled by Elston and Maria Richardson. Richco Realty then paid Core Business Training. After Core Business Training received the payment from Richco Realty, the funds were immediately sent via wire transfer to an unknown account.
11When the training company was Meridian, the payments were made by Richco Realty, with one payment made by EMAS Management Accountants which is another name for Richco Realty. Meridian deposited almost all of the payments into the Gescoro RBC account (#06702 109-263-4). Ms. Moosa was unable to trace the funds after they were deposited into Gescoro’s RBC bank account.
12With respect to Beauty Industry Training, Fabio Recchia, the principal of Beauty Industry Training received payments from Competitive Computing with respect to Paradigm Painting and Terracotta; two companies involved in the misappropriation scheme.
13Robert Spano is the principal of 2328425 Ontario Ltd./ICON 1 Communications Ltd.. ICON received a cheque from YMCA for $37,500 on January 6, 2017. The cheque was deposited into its bank account. A cheque was sent the same day to Competitive Computing in the amount of $28,250 (75% of the YMCA deposit). Competitive Computing then disbursed $5,000 to Dayana Pantaleo, $11,300 to Event Renew and $1,412.50 to Beauty Industry Training. Event Renew issued 2 cheques to Thomas and Christine Burns on January 19, 2017.
Analysis
Motion to Extend the Time of the Norwich Order
14YMCA seeks an order extending the Norwich Order to May 31, 2022.
15Following the order dated August 30, 2021, YMCA received voluminous banking records from the Respondent Banks. YMCA undertook additional forensic investigation. Additional material has been requested of the Respondent Banks. YMCA argues that it is necessary to extend the Order to allow the banks to provide the additional information.
16I am satisfied that the Norwich Order continues to be necessary for YMCA to obtain additional documentary evidence with respect to the alleged fraud. YMCA undertakes to indemnify the banks for any reasonable costs associated with complying with the Order. The Respondent Banks will not be prejudiced if the Order is extended.
17I grant the relief sought and extend the Norwich Order to May 31, 2022.
Broaden the Scope of the Norwich Order
18A Norwich Order compels a third party to provide information to the moving party where the moving party believes it has been wronged and requires the third-party’s assistance to determine the circumstances of the wrongdoing: Isofoton S.A. v. Toronto Dominion Bank, 2007 CanLII 14626 (ON SC), 85 O.R. (3d) 780, at paras. 2 and 28. In exercising its discretion on a Norwich application, the court is to consider the following:
(a) Does the applicant have a bona fide claim?
(b) Was the third party from whom the information is sought involved in the events giving rise to the claim?
(c) Is the third party the only practicable source for the information?
(d) Can the third party be indemnified for the cost of complying with the order and any potential damages that might flow from compliance? and
(e) Do the interests of justice favour granting the relief sought? Isofoton S.A. v. Toronto Dominion Bank, at para. 40.
19By endorsement dated December 10, 2021, I found that the moving party had established its claim was not frivolous or vexatious. I was also satisfied that the Respondent Banks were innocently involved in the fraud and that the banks are the only practical source of the information at this time. YMCA agreed to indemnify the bank for any reasonable costs associated with complying with the Order. At that time, I was of the view that the evidence filed by YMCA was not sufficient to establish that the banking records of the individuals were relevant and necessary. I did not broaden the scope of the Norwich Order but stated that this was without prejudice to YMCA providing further evidence to establish a connection between the individuals and the alleged fraud.
20I am satisfied that the additional evidence filed by the YMCA on this motion establishes a sufficient connection to the fraud to order production of the personal accounts.
Elston Richardson is the principal of Core Business Training which was one the training companies involved in the fraudulent scheme. Elston Richardson along with his wife Maria, were principals of Richco Realty. Richco Realty was involved in distributing the funds paid to Core Business Training and Meridian, pursuant to the COJG program.
Maria Richardson received funds from Richco Realty and paid them to Empire Beauty Solutions. She may have used some of the funds to pay for renovations to a property and to buy a condominium unit. From January 2015 to September 2018, Richco Realty transferred approximately $720,000 to Maria Richardson and her daughters.
Danyana Pantaleo is a principal of Competitive Computing. It paid some of the money received from the YMCA back to Christine Burn’s company, Event Renew. Competitive Computing’s share of the YMCA cheque was transferred into the TD bank account in the name of Dayana Pantaleo.
Maurizio Bianconi is the principal of Meridian, which was one of the training companies involved in the fraudulent scheme. Its transactions with respect to the COJG program, were only in cash. Meridian received a share of funds when the trainer was Core Business Training.
Robert Spano is the principal of ICON. ICON paid 75% of the amount it received with respect to the training program, to Competitive Computing. YMCA also paid $62,475 to one of the employer companies; Viztron. Viztron issued a cheque in the amount of $10,000 to Robert Spano and another cheque to ICON in the amount of $34,926. ICON issued a cheque to Event Renew.
Fabio Recchia is the principal of Beauty Industry Training (BIT). He was also the principal of Versai Salon, one of the employer companies that participated in the COJG program. BIT made payments to Event Renew. BIT also received $54,014 from Competitive Computing.
Thomas Burns is the spouse of Christine Burns and a principal of Event Renew, which received payments from Competitive Computing and ICON. Thomas Burns also received payments directly from Event Renew.
21Ms. Moosa states in her affidavit that the banking records for the individuals set out above, are necessary to determine the extent to which the individuals were involved in the fraud and whether they may have financial assets available for recovery.
Disposition
22I am satisfied that the documentation sought is relevant and necessary for YMCA to obtain documentary evidence with respect to the alleged fraud. I conclude that the interests of justice favour granting the relief sought.
23I order that paragraphs 1, 2, 3 and 4 of the Norwich Order of Myers J. remain in effect to May 31, 2022. I also order that the scope of the Norwich order is extended to include the personal accounts of Elston Richardson, Maria Richardson, Dayana Pantaleo, Maurizio Bianconi, Robert Spano, Fabio Recchia and Thomas Patrick Burns.
24The Order to go in accordance with the draft Order filed and signed by me.
DATE: March 3, 2022